Brown Shoe posts 1Q loss on restructuring charges

Brown Shoe posts 1Q loss on restructuring charges; results beat estimates but miss on revenue

Associated Press

NEW YORK (AP) -- Brown Shoe Co. says Wednesday it swung to a loss in the first quarter from a year ago as results were dragged down by certain restructuring charges.

The company said it lost $10.8 million, or 26 cents per share, in the three-month period ended May 4. That compares with a profit of $1.7 million, or 4 cents per share, in the year-ago period.

Excluding restructuring costs, the company earned a profit of 32 cents per share.

Revenue slipped 1.6 percent to $588.7 million from $598.2 million.

Analysts had expected 22 cents per share on revenue of $608.1 million, according to a survey by FactSet.

Sales in stores open at least a year — a key metric of a retailer's health — rose 1.1 percent during the quarter. Brown Shoe operates nearly 1,300 Famous Footwear and Naturalizer retail stores.

"Despite uncooperative weather in February and March, we were able to deliver better-than-expected results for the quarter," said Russ Hammer, chief financial officer of Brown Shoe, in a statement.

During the quarter, Brown Shoe said it sold its Avia and Nevados brands to Galaxy Brand Holdings Inc. for $74 million. It plans to use the proceeds to pay down debt.

Revenue at Famous Footwear climbed 1.5 percent to $352.3 million as sales of athletic shoes and canvas shoes increased.

Wholesale sales were down 2.9 percent, excluding brands that were discontinued or sold in the first quarter. The company's contemporary fashion wholesale sales slipped 2.5 percent in the first quarter, while Healthy Living wholesale sales were down 3.1 percent. Both figures reflected brands that the company exited.

The company raised its full-year earnings-per-share outlook to $1.22 to $1.29. In March, it had predicted earnings per share to be between $1.18 and $1.25.

The company said it expects sales to be $2.54 billion to $2.57 billion for the year.

Analysts expect earnings per share of $1.23 and revenue of $2.55 billion, on average.

In afternoon trading, Brown Shoe shares rallied 12.3 percent, or $2.28, to $20.81.

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